The war in Ukraine has been costly for the Putin government, as well as for non-combatant Russians themselves, who are suffering as a result of the embargoes and sanctions applied to their country. Currently, Russia cannot use the dollar or the euro, and although the ruble has recovered, few companies are willing to trade with the Russian government, let alone the Russian currency.
That is why, in a measure that tries to evade these sanctions, both the Russian Ministry of Finance and the Bank of Russia. Despite the logistical problems involved in cryptocurrency transactions, in addition to the difficulty in avoiding slippage in crypto, the government needs an escape route to maintain a certain level of commerce within its country, which is why it is necessary to opt for a way to channel cross-border trade, without it having to go through international fiats, and cryptocurrencies, being decentralized, are the main alternative that the Russian government has to avoid an economic collapse.
Russia: a ruble on the rise, but an economy on the verge of collapse
Even though the ruble has been appreciated to a point not anticipated even by the best analysts, the truth is that it is no reflection of the true situation of the Russian economy, which is at a point of no return. Even though the purchasing power of the Russians, in terms of the value of money, has not been affected too much, at least after several months of the start of the conflict, there are serious problems of shortages within the country, in principle, thousands of companies around the world have terminated their contract with the Russian authorities and have left the country.
In addition to this, the local company is being severely affected by the logistical impossibility of accessing foreign merchandise. Even though Russia is perfectly capable of producing its agricultural goods, to the extent that the climate allows it, many of the foods, industrial products, and retail products that globalization has brought to its shores cannot be purchased, today by today, by the Russians, which, of course, has caused a great setback for their society, and endangers the integrity of the Putin government itself.
Will cryptocurrencies save Russia?
The quickest answer would be no, at least not completely, as we have already said, there are several difficulties for a government to use cryptocurrencies for buying, for starters, they cannot generate as many as they want to generate more liquidity and transactions depend on the pace of mining, which in many is usually quite slow, in addition to the fact that the blockchain of most of those that use the same Bitcoin protocol cannot carry out the same number of transactions at the same time as a bank and the more volume there is, the longer the times, the higher the slippage and the higher the commissions.
That is why, initially, the Russian people as a whole will not be able to adopt cryptocurrencies to make all the transactions they need every day, so the situation will most likely continue to be precarious.